Despite declining foreign investments that Nigeria might be experiencing as a result of increased tension in the build-up of the 2019 elections, alongside increasing rates in advanced countries that has aggravated sell offs in emerging markets, Nigeria’s population is still a number that no investors would want to ignore, Jimoh Ibrahim, CEO for coronation merchant bank said.
“Investment is all about risk and returns, even in worst economies, investors will always be interested in investing if they knew they will get a premium for the kind of risk they are taking. A country like Nigeria, with a population of 198million, which is a number no investor will ever want to ignore”, Jimoh said at the side-line, when the bank partnered the Chattered financial Analysts (CFA) society in attracting investment in Nigeria.
Foreign direct investment in Nigeria fell to 379.84 billion naira ($1.2 billion) in the first half of the year from 532.63 billion naira ($1.7 billion) a year earlier, the Central bank of Nigeria said in its half year economic report.
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The apex bank also noted the closure of two global banks (HSBC and UBS) local offices in the countries, for reasons not disclosed.
Controversies have trailed their closure especially given the fact that HSBC has had several backlash from the government after it predicted that Nigeria’s president Buhari’s victory in the 2019 elections will stall the economy. In the same vein, UBS has also expressed displeasure over the CBN’s hammer on the country’s biggest non-oil foreign direct investment, after the former instructed the telecom giant to bring back an $8.1 billion it illegally repatriated as dividend since 2007.
Jimoh said “it is normal, some investors will come, while some will leave, because they redefine their risk reward frame work from time to time, and if this risk reward frame work is no longer in line with their expectations, it doesn’t mean that things are not the way they should be”.
“On the issue of MTN, Jimoh said the regulator has decided on, the regulator must have done their investigation and decided on the best decision for the country. Of course, it will have impact on direct investors but the government is also interested in resolving the situation in such a way that it doesn’t have much negative impact on the economy. As such, I am sure very soon, it will be resolved”.
However, while the talk of the exit of these lenders have raised questions in the heart of investors, Egyptian financial services giant, EFG Hermes last week, announced it will be getting an investment-banking license in Nigeria this week, as part of its plans in expanding its capital market business across frontier markets.
“In any country, during elections, you always see the Impact on the economy especially in the market. If you look at the US, even with the Mid-term elections the New York stock index dropped by more than 2000 points over in the last three weeks, so the situation is not peculiar to Nigeria. I think the government is doing what they need to do to ensure that the ease of business continues to improve and investors are going to keep coming in”.
“I think also that things are going to get better, as it takes time for impact of infrastructural things put in place to be felt in an economy. I think overtime we will start seeing that the effort of government and Central Bank is yielding result”, Jimoh said
“We in Coronation Merchant bank, will continue to support the government in ensuring that when investors wants to come we support them to come in very easily”.
